This fact sheet provides general information concerning the establishment of prevailing
wages and commensurate wages as they pertain to the employment of workers with disabilities
at special minimum wages. Please read
Fact Sheet No. 39,
The Employment of Workers with Disabilities at Special Minimum Wages, for a general overview
of the provisions of Section 14(c).
Please consult the Regulations,
29 CFR Part 525,
Employment of Workers with Disabilities under Special Certificates,
for detailed information concerning Section 14(c).
These Regulations may be found at
http://www.ecfr.gov.

What is a commensurate wage?

A commensurate wage is a
special minimum wage paid to a worker with a disability that is based on his or
her individual productivity (no matter how limited) in proportion to the
productivity of experienced workers who do not have disabilities performing
essentially the same type, quality, and quantity of work in the vicinity where
the worker with a disability is employed. The commensurate wage in the context
of work subject to Section 14(c) is always less than the applicable
minimum wage
required by section 6(a) of the FLSA, or where applicable, the prevailing wage
required by a McNamara-O'Hara Service Contract Act (SCA) Wage
Determination.

How does an employer determine the proper commensurate
wage for each employee with a disability?

In order to determine the commensurate wage, the employer
must first examine the work to be performed by the employee with a disability,
and through the use of an accepted work measurement technique, develop a "standard"
that accurately measures the quality and quantity of that same work when
performed by workers who do not have disabilities. Work measurement methods,
such as time studies, Modular Arrangement of Predetermined Time Standards
(MODAPTS), and Methods-Time Measurement, are used by employers to determine the
length of time it should take a worker who does not have a disability to
perform an operation, or element of an operation. The commensurate rate is then
determined by comparing the performance of the worker with a disability against
that "standard." In very simple terms, if the worker with a
disability is 60% as productive when performing a particular job as is the
experienced worker who does not have a disability performing the exact same
job, the commensurate wage for that worker with a disability would be at least
60% of the prevailing wage (the wage rate paid to the experienced worker who
does not have a disability).

What is a prevailing wage under Section 14(c)?

The prevailing wage for a particular job performed by a
worker with a disability who receives a special minimum wage is the wage paid
experienced workers who do not have disabilities performing essentially the
same type of work in the vicinity. An employer paying a special minimum wage
must be able to demonstrate that the prevailing wage rate used to determine a
commensurate wage was objectively determined. Normally, prevailing wage rates
are based on the results of surveys conducted by the employer. The prevailing
wage is not an entry-level wage or a training wage, but the wage rate paid
experienced employees after completion of any training or probationary periods.
An experienced worker is one who has learned the basic elements or requirements
of the work to be performed, ordinarily by completion of a probationary or
training period. Typically, such a worker will have received at least one pay
raise after successful completion of the probationary or training period. The
prevailing wage may not be lower than the applicable statutory minimum wage as
established by section 6(a)(1) of the FLSA or, where applicable, a higher
State minimum wage.

How does an employer conduct a prevailing wage survey
under Section 14(c)?

To conduct a survey, the employer must obtain wage
information for each job classification being performed by workers to be paid a
special minimum wage.
A brief job
description should be prepared that defines the specific job duties,
responsibilities and tasks; identifies the types of equipment and supplies used
to perform the tasks; lists the types of skills, education or experience levels
required; and indicates the location, and days and times of the week the work
will be performed.

The employer should obtain wage data from comparable
businesses in the vicinity that primarily employ workers who do not have
disabilities performing the same work and utilizing similar methods and
equipment as used by the worker with a disability. A comparable business is one
that either employs a similar number of employees or competes for contracts of
a similar size and nature. The appropriate size of the sample - the number of
firms surveyed - will depend on the number of firms doing similar work in the
vicinity, but normally should include no less than three. The prevailing wage
information should be solicited, preferably in writing, and the employer
conducting the survey should record the following information regarding each
prevailing wage survey contact:

date of contact;

name, address and phone number of firm
contacted;

individuals contacted within each firm
and the title of each individual;

the wage rate information provided and
the basis for concluding that each rate submitted was not based upon an
entry level position;

a brief description of work for which
wage information was collected.

After contacting a sufficient number of comparable firms,
the employer must average the wage information provided to determine the
prevailing wage for a particular job. The employer may use either a weighted or
simple average so long as he or she is consistent. See the following example:

Weighted Average vs. Simple Average

Employer

No. ofEmployees

Wage Rate Reported

Gross Wages(#Employees X Wage)

XYZ, Inc.

99

$7.55

$747.55

ABC, Inc.

17

$7.82

$132.94

RST, Ltd.

25

$8.00

$200.00

3 Employers

141 Employees

$23.37

$1,080.49

Weighted Average:

$1,080.49÷141
employees = $7.66305 or $7.67*

Straight Average:

$23.37÷3 employees = $7.79

*Note that in this example the weighted average yields a prevailing wage rate of $7.66305,
but the employer rounded it up to $7.67 per hour. If the employer rounded to $7.66,
he or she would be establishing a prevailing wage rate that is less than
the true prevailing wage rate (less by $0.00305 per hour).
The Wage and Hour Division will not normally question computations that are carried
out to the fifth decimal point and then rounded up to four decimal places.
The employer could, of course, round up (but not merely round off) sooner.
For example, .04974 should be rounded to .0498 or .05.

Must all employers of workers with disabilities paid
special minimum wages conduct prevailing wage surveys?

No. If an employer's workforce consists primarily of workers who
do not have disabilities, the wage rate that the employer pays to his or her
experienced workers who do not have disabilities who perform similar work may
be adopted as the prevailing wage. Similarly, if an agency or community
rehabilitation program places a worker with a disability on the premises of
such an employer, the wage paid the employer's experienced workers who do not
have disabilities performing similar work may be used as the prevailing wage.

In addition, the prevailing wage
for workers with disabilities performing as service employees on contracts
subject to the Service Contract Act would be the wage listed for the
classification of work being performed on the Department of Labor Wage Determination
included in the contract (if any). If a Wage Determination is included in the
contract, all service employees (included those paid special minimum wages)
must also receive the full fringe benefits listed on the Wage Determination. Please
see Fact Sheet 39F, The Payment of Special
Minimum Wages to Workers with Disabilities Who Are Employed on Federal Service
Contracts Subject to the McNamara-O'Hara Service Contract Act, for more
information concerning the Service
Contract Act.

Finally, if the employer has a subcontract to perform a job
in essentially the same way and with the same type of equipment as the prime
contractor, the employer may use as the prevailing wage the wage rate the prime
contractor pays to his or her experienced workers.

How often must an employer conduct a prevailing wage
survey?

The prevailing wage survey must be conducted prior to paying
a special minimum wage. It then must be reviewed and updated at least once a
year - more frequently when a change in the prevailing wage has most likely
occurred, such as when the FLSA minimum wage or a higher State minimum wage has
been increased.

A word about the rules of ROUNDING when computing special minimum wages.

Section 14(c) requires that workers with disabilities for
the work performed who receive special minimum wages must receive at least
the commensurate wage for all hours worked. An employer who follows the normal
business rules of rounding - rounding "up" only when the last decimal
point is a five or higher - may actually be underpaying workers with
disabilities. Although the underpayment per unit produced would be very small,
the eventual back wage liability could be quite large considering the number of
units that could be produced over an extended period of time by a number of
different workers. This can be avoided by carrying computations out to the
fifth decimal and then always rounding up to the fourth place. The Wage and
Hour Division will accept the practice of carrying out computations to the
fifth decimal point and then rounding up to the fourth decimal place as
compliance when computing special minimum wages due workers with disabilities under
Section 14(c). Of course, an employer may round "up" sooner than the
fifth decimal point.

How can I obtain more information about commensurate wages, prevailing wages, or other provisions
of Section 14(c) and the FLSA?

For more information about these provisions, review the other fact sheets in this series which address Section
14(c) located at
http://www.dol.gov/whd/sec14c/index.htm
or call your local Wage and Hour Division Office.
These offices can be found in the blue pages of your telephone directory. You may also call 1-866-4US-WAGE
(1-866-487-9243). For more information about other laws enforced by the Wage and Hour Division, visit our
e-laws Advisor at
http://www.dol.gov/elaws/.

This fact sheet is intended as general information only and does not carry
the force of legal opinion.

The Department of Labor is providing this information as a public service. This information and related
materials are presented to give the public access to information on Department of Labor programs. You should
be aware that, while we try to keep the information timely and accurate, there will often be a delay between
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regulatory information published by the Department of Labor. We will make every effort to correct errors
brought to our attention.